Before the loan advances, a quality-control reviewer must resolve a RESPA servicing and affiliated-business rules issue in an annual compliance meeting. What should happen?

Correct Answer

B) Follow the servicing notice or response timeline

Why this is correct: The Real Estate Settlement Procedures Act (RESPA) and Regulation X impose specific deadlines on servicers for actions like acknowledging qualified written requests (QWRs) and providing error resolution responses. The governing concept is that these timelines are mandatory and must be followed. The correct answer, "Follow the servicing notice or response timeline," is the compliant action that directly addresses RESPA's servicing rules. Why the other choices are wrong: The choice "Use an internal exception instead of the required federal disclosure or timing rule" is wrong because internal policies cannot override federally mandated RESPA timelines. The choice "Wait until a regulator asks for the file before applying the federal requirement" is wrong because RESPA deadlines are triggered by borrower requests and must be met promptly, not delayed. The choice "Delay the RESPA Affiliated Business Arrangements step until a later high-cost loan review instead of acting now" is wrong because RESPA requirements for affiliated business arrangements (like providing the AfBA disclosure) have their own timing rules that must be followed when triggered, not postponed to a different review. Exam tip: In RESPA servicing, timing is everything. The correct answer will often involve adhering to a specific deadline (e.g., 5 days, 30 days, 60 days).